Target announces layoffs at company headquarters
Target Corporation has announced thousands of job cuts, most of them at company headquarters, set to roll out over the next two years. CEO Brian Cornell, who joined Target last year, told investors the cuts were part of a broader turnaround.
The biggest event in Target’s recent history was a black eye for the retailer: A data breach in 2013 that saw millions of customer credit cards exposed to possible fraud.
However, that’s not what’s behind these cuts, says Brian Yarbrough, an analyst from Edward Jones. “Of course some customers will never shop them again,” he says. “But for the most part, most of the customers have come back. So I don’t think this has anything to do with the data breach.”
There have been other problems, too — like a failed expansion into Canada, which collapsed. Target Canada filed for bankruptcy in January after just two years in operation. It’s in the process of closing more than 100 stores and laying off more than 17,000 workers.
“Target’s last five years have been the most challenging in the history of the company,” says Burt Flickinger, managing director of Strategic Resource Group, a retail consultancy. “Every major move Target made seemed to be a major management mistake.”
However, Flickinger thinks the company may be poised for a rebound. For instance, he thinks Target is addressing supply-chain problems, which helped sink Target Canada and which Flickinger says have hurt stores here.
Also in the works: A new emphasis on fancier groceries, to lure younger shoppers. Once shoppers come to Target, the thinking goes, they will buy stuff. Come for the organic yogurt and gluten-free granola, stick around and pick up some pants or a deck chair.
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